Professional Services Automation Software

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Professional Services
Automation Software

by Faulkner Staff

Docid: 00017650

Publication Date: 1809

Report Type: TUTORIAL


Professional services automation (PSA) software provides a company with
internal and external resources for managing personnel, projects, project
portfolios, time, and expenses. The software may be one product or a suite
of integrated products. Among the factors influencing the development of
PSA software are the continued utilization of offshore outsourcing, the
reported net increase in domestic IT jobs, and the continual demand for
increased productivity and financial accountability in the management and
execution of projects. There are a number of successful vendors in the
market serving businesses of all sizes and types.

Report Contents:

Executive Summary

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The term Professional Service Automation (PSA) is used in several
ways, and two vendors may not mean exactly the same thing when they
use it. Generally, PSA is defined as “a suite of software enabling IT
organizations to manage people and skilled resources.” Implicit in this
definition is a high level of quality and productivity in the delivery of
the services provided. Generally speaking “professional services” means
consulting services, ordinarily provided by one company to another,
although this definition too is elastic.

Outsourcing Best Practices Tutorial

Studies have shown that the number of new IT jobs, both in the US and
around the world, is increasing, with a number of these new positions
created in the professional, consulting, and other business services
areas. Projections are that the demand for contractors in
IT organizations will increase as more consultants, including
software developers, engineers, systems architects, technical writers, and
proposal developers, are enlisted. This seems a reasonable projection
since the same phenomenon is occurring in other fields.

All of the supporting services for part-time employees must be tracked
and billed, and each customer project demands detailed tracking of
expenses and other quantitative factors. As the nature of business becomes
more complex and projects more intricate to track, the need for software
to meet these needs becomes more apparent.

PSA software aims to address this problem by streamlining the processes
involved in delivering billable services to outside customers and by
providing support internally to workers within organizations. Although PSA
applications have been adopted by a number of professional service
organizations (PSOs) and by IT firms in particular, this niche in the
applications market still offers potential for growth as vendors prepare
to meet the growing number of firms seeking PSA software.

Studies show that as many as half the organizations surveyed intend to
implement or expand PSA software within the next few years. A large number
of smaller vendors have entered the PSA marketplace in the past few years,
delivering innovative products and services that leverage the PSA software
foundation of customer relationship management (CRM) and enterprise
resource planning (ERP) begun by larger firms such as Oracle and SAP.
Increasingly, these firms are expanding into new areas of PSA software,
including manufacturing, engineering, AutoCAD design, and even

Both major and niche players utilize certain key elements in their PSA
software suites that are characteristic of the market and the needs of
businesses. These include billing and invoicing; client relationship
management; project tracking and project portfolio management; and time
and expense management solutions.

The enterprise must decide whether to use a product in-house or source it

Large vendors such as Oracle and SAP can offer customized solutions, but
even smaller vendors are offering modular packages to the same
effect. As vendors become increasingly sensitive to industry-specific
issues they have enlarged the number of solutions available. 

Three additional current trends are remotely hosted PSA
Software-as-a-Service (SaaS); links to other web-based resources such as; and mobile access.


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PSA software assists PSOs, IT departments, and other service groups in
more effectively managing workers, projects, and clients. Services
integrated through PSA software include assignment and scheduling; contact
management; billing and invoicing; client management; forecasting; time
and expense reporting; and resource management. 

With the improvement of the economy, the number of IT employees continues
to rise, including full-time hires, contract workers, and consultants. A
barrier to the creation of full-time IT hires is the increasing cost of
health insurance. As a result, it is expected that many organizations will
continue to expand their efforts to outsource for independent and W2
contractors, which eliminates the payroll burden of footing the bill for
Social Security and health insurance premiums. 

Although this trend has definite negative aspects, it is beneficial
for the growth of the PSA software market. As outsourcing of independent
contractors increases, so does the need for managing their projects and
profiles. It is increasingly cost-effective for such businesses to invest
in a PSA solution that manages contractors and other key functions
that might previously have been handled by corporate Finance and Human
Resource departments.

Generally, it could be assumed that as firms add full-time personnel,
demand for PSA software for consultants would diminish. However,
in this day of increasingly productive workers, it is likely that
firms will continue to deploy PSA software to increase the effectiveness
and productivity of the IT staff they currently have in place.

Since project outsourcing has become increasingly common, the IT-related
services market continues to grow faster than most other services-related
businesses, not only in terms of revenue but also in terms of the number
of new players entering the market. In addition, IT service providers
typically have large numbers of internal and/or external clients at a
single time, with each project demanding a different set of skills and
resources. Combined, these factors have made IT services firms the most
natural users of PSA software, so PSA applications will continue to be
most common in the IT realm.

Table 1 describes a sampling of the major providers of PSA software. It
should be noted that the field is well-populated, with new vendors
targeting all sizes of organizations.

Table 1. Top PSA Providers and Applications


Market Size




Small, Mid-Large

Autotask’s product is offered only as SaaS, emphasizing its
position “in the cloud” and its offering of dashboard
capability. The business management solutions that make up the
Autotask suite are designed to help PSOs, including IT, AEC,
government, engineering, accounting, advertising, manufacturers,
and resellers, manage projects and increase ROI. Autotask
emphasizes its robust customization capabilities. Modules
include service desk, project management, and dispatching.


CA PPM (formerly CA Clarity PPM)


Intended for large sized organizations, CA PPM delivers a full
set of project and portfolio management tools, including Clarity
Portfolio Manager; Clarity Resource Manager; Clarity Project
Manager; Clarity Demand Manager; Clarity Financial Manager; and
Clarity Process Manager. Clarity has close ties to Salesforce.




Compuware’s Changepoint solution features a single management
point for its software, which automates core business
processes of corporate IT departments, aligning, monitoring, and
managing the IT Portfolio in light of corporate goals. The tool
also can be used to automate the business processes of services
organizations, and to provide productivity metrics.




ConnectWise claims to be the leading provider of SaaS versions
of PSA software for IT Discovery Remote Management. Its large
product suite contains Help Desk and dispatching modules, as
well as time-tracking, billing, and sales quoting, and is
structured on ITIL principles.

Netsuite and QuickArrow

Netsuite OpenAir PSA (QuickArrow)


Netsuite acquired QuickArrow in 2009. The OpenAir PSA is a
web-designed offering featuring a full suite of on-demand,
integrated applications, ranging from timesheets and expense
reports to complex project and resource management modules
appropriate for both small and large organizations. QuickArrow
incorporates time/expense/billing management, project
management, resource management, and strategic business
analytics into an overall professional services management
package, in-house or on the Internet (SaaS), and integrates with
Salesforce, MS Project, and QuickBooks.


Oracle for Professional Services; Oracle PeopleSoft Enterprise
Service Automation


PeopleSoft, now owned by Oracle, was for years the leader in
the PSA field. The Oracle for Professional Services suite
features applications that address all aspects of professional
service management. The company’s PeopleSoft Enterprise Service
Automation suite (v 9.2) helps businesses control the processes
and costs of resource management, including project management,
employee utilization, and time and travel expenses. Oracle also
provides an application platform called Fusion.


SAP for Professional Services


SAP for Professional Services offers customer contact, project
quotation, task management, billing, and performance analysis,
and offers audit and tax resources. Integrates with all of SAP’s
other enterprise offerings.

Upland Tenrox


Mid-Large Enterprise

Upland’s Tenrox highlights its connections to Microsoft
products, including integration with Microsoft Project Server
and Microsoft’s CRM. It includes a modeling system
for annual forecasting. Its product is SaaS and stresses
workflow management.


Tigerpaw Business Suite

The latest Tigerpaw version includes a ticketing system and an
e-mail analysis capability. It specifically targets telecom,
computer networking, system integrators, and sales and service.
Available on mobile, Saas, and on-site platforms.

Unanet Technologies

Unanet Professional Services Automation (PSA)


The Unanet PSA software tracks and manages people and
projects. It stresses its graphical reporting capability. Its
building blocks include project management, resource management,
time tracking, and expense management. It stresses its easy
integration with other products, and is available in in-house
and offsite versions.

While IT firms have been major adopters of PSA applications, companies in
other industries are now implementing PSA software in greater numbers. As
the market continues to grow, PSA software vendors are branching out into
other areas, seeking growth in industries such as manufacturing,
engineering, telecom, and other “non-white collar” industries. Vendors are
seeing the benefits of broadening their target markets to reach firms in
other industries that offer the potential for making use of PSA software.
Open source PSA products such as OpenPSA are also available.

Current View

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PSA products increasingly are available either for in-house installation
or for hosting on the web. The rapid growth of web mashups has
led PSA vendors to provide an increasing number of hooks into other
web applications. A typical example in the PSA field is a connection to
the popular business site 

The look and feel of PSA products vary considerably from vendor to
vendor. Some PSA offerings are installed on user desktops and accessed by
a proprietary, application specific interface. Others are installed on a
server and accessed by clients via a Web browser. Still other vendors have
incorporated PSA functions as components of a larger product,
utilizing the interface of that system.

PSA applications were created to meet the demands of professional
services organizations. As such, PSA software aims to apply concepts
appropriate for automating sales, sharing knowledge, manufacturing, and
other business operations involving the delivery of professional services.
PSOs have long benefited from the automation process, which has evolved,
becoming more and more complex and branching out into everything from
accounting systems to project management, marketing, and

The evolution of automation technology will continue as vendors develop
features to streamline more of the mission-critical functions that
businesses carry out on a daily basis. Business intelligence capability
will further extend the capability of PSA software. The rapid growth in
use of mobile devices will add a new dimension to PSA products over the
next few years.

There are features that have primarily attracted companies from
various industries to PSA software, and these same key features – plus
whatever added capabilities vendors may eventually add to
these features – will continue to attract more customers and to
propel the PSA software market forward.

The components that are typically found in PSA applications include:

  • Time and Expense Management – Considered one of the
    most crucial features in any PSA package, time and expense management
    allows companies to document billable hours and to track billable
    expenses for clients. Artifacts include timesheets, expense reports, and
    time-off requests that are routed to supervisors. This feature reduces
    processing time, increases productivity, and is often Web-based for easy
  • Billing and Invoicing – PSA software must be able to
    track billable hours logged by consultants, to factor in expense
    charges, and to generate invoices based on these computations.
    Invoices can be generated from custom-defined payment schedules, and
    approval processes can also be designed to prevent invoices from being
    delivered before approval. Invoices must be created, reviewed, and sent
    in a timely way in order to ensure that clients pay quickly for services
    rendered, especially for smaller businesses with an unsteady inflow of
    cash, so billing and invoicing options are necessary. PSA
    applications can also shorten the process of dealing with
    misunderstandings over invoices.
  • Customer Relationship Management – This feature
    typically includes an integrated view of a company’s prospects and
    customers, including key items such as history, notes,
    opportunities, contacts, projects, service prospects, and customers.
    This features aids in developing a powerful and efficient sales pipeline
    for a business.
  • Document Management – Document management
    capabilities typically provide a common user interface enabling those
    who access corporate documents to receive a standard rendering of those
    documents regardless of location. Such systems not only allow businesses
    to provide documents including spreadsheets, diagrams, and reports in a
    specified format, but they also provide more security options than do
    standard file systems.
  • Knowledge Management – Businesses that rely on
    knowledge management do so for the purpose of collecting and
    centralizing within one data base all their corporate knowledge about
    customers and about their own employees and the skills those employees
    possess. To be truly effective, businesses must ensure that their
    repositories of confidential information are accessible by relevant
    parties within their corporate environments. By using knowledge
    management, businesses no longer have to rely on individual employees to
    remember and share pertinent information. In an economy where job
    turnover rates can be significant, businesses frequently do not want
    to entrust the task of safeguarding and disseminating information
    to individuals who may or may not be available in the future. Because
    PSA packages enable businesses to maintain databases of workers and
    their skills and backgrounds, businesses can refer to their own
    databases to plan schedules and assign staff members to particular tasks
    that reflect their talents and competencies.
  • Marketing Automation – PSA software can allow
    businesses to create central databases for keeping data on potential
    clients. Businesses can also report on current customers of
    organizations listed in their databases. By doing this, businesses are
    able to automate the process of marketing initiatives, whether they
    choose to market via Web-based promotional campaigns or by direct mail,
    collecting statistics and demographics on firms listed in their
    databases so that they can put together marketing campaigns in a
    short time.
  • Project Tracking and Project Portfolio Management – Often
    products feature an integrated data base so that projects and accounts
    are automatically connected. A project tracking package will often
    include process automation tools to ensure that deliverables are on time
    and within budget, helping to manage the problem of “scope creep.”
    Additional features may include project portfolio management, which
    connects business and project teams for better control and analysis of
    the project portfolio. Frequently, project tracking and project
    portfolio management features are designed to streamline and automate a
    company’s internal sales proposal and request for proposal (RFP)

PSA products are simpler than ERP, supply chain management, and other
enterprise software. Most packages are modular, allowing for small-scale
implementation of only a select group of desired components. Vendors
have developed PSA products that combine the building blocks of ERP and
CRM packages and add more key features such as project and inventory
management to streamline a business’s operations without the additional
payroll expenses and time constraints associated with increased personnel.


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The Enterprise Resource Planning (ERP) and Customer Relationship
Management (CRM) markets continue to be the core building blocks of the
PSA market. Large vendors such as SAP and Oracle Systems were the first to
offer such products, adding functionality to procurement and CRM with the
creation of automated software products.

With the evolution of the PSA software market, businesses are focusing on
their overall IT architecture to determine the software portfolio
processes that suit them best. As a result, the market has generated
a proliferation of PSA vendors, and with them, new niche products, some
taking advantage of the latest mobile technology.

PSA products are poised for continued growth in coming years due to their
inherently close tie in to CRM software, which constitutes the core of
PSA. This, combined with the need for managing contracts and projects –
essentially, professional talent – is a key in tracking the type of
project-based work that is at the core of revenue generation for law
offices, accounting firms, and other organizations.

The increasing use and flexibility of Internet applications suggests that
the use of PSA as Software-as-a-Service (SaaS) will continue to increase,
as will the ability of PSA products to link via mashups to other related
web applications, and to mobile devices.

PSA is not strictly limited to “white collar” industries as it once was.
Increasingly, manufacturing and industrial concerns are demanding the same
automation that helps to improve bottom line and increases workforce
efficiency across the company. This demand, in turn, has fostered PSA
products for these industries. For example, PSA firms such as Autotask and
Epicor Software feature products that largely target manufacturing and
engineering concerns, industries described as “blue collar” in earlier
years. As disparate industries adopt CRM, ERP, and PSA products,
possibilities increase for this growing market.


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Organizations considering implementing PSA software should first
determine what features they require. Not all businesses will require all
available solutions, so it is important to understand the differences
between possible and necessary, and the benefits to be derived from
various solutions.

There are, however, some features that any PSA software should
include. Features to seek in PSA software include the ability to be used
by remote workers; an automated billing system; decision support
functions; and the ability to connect to other systems, and, frequently,
to project management software.

  • The Ability to Accommodate Remote Users – If a
    significant number of consultants, IT or otherwise, work off-site at a
    client’s premises, the ability to allow remote interaction is highly
    desirable in PSA offerings.
  • Automated Billing – One of the key selling points of
    PSA software is its ability to track chargeable expenses and billable
    hours. PSA products can use these calculations to automatically generate
    and deliver invoices. Such products streamline the process of delivering
    services and enable providers to devote a greater portion of their
    staffs to billable services rather than to internal administrative
  • Decision Support Functions – Some PSA offerings
    feature basic decision support capabilities that identify the
    profitability of particular staff members, areas of service, and types
    of expertise. This information can be used to determine future staffing
    levels and business strategies.
  • Connection to Back End Systems – PSA software is
    being implemented in many cases on a small-scale, standalone basis. If
    the technology matures and becomes more widely relied upon, integration
    with other corporate functions will be desirable. To anticipate these
    future demands, customers should only implement products that can be
    expanded in the future and that can integrate into other systems, such
    as ERP systems.
  • Project Management Features – Having an integrated
    data base that is built into the PSA module is essential for a
    viable PSA software solution. This not only allows projects to be
    seamlessly connected to a company’s accounts, but ensures that the
    projects are delivered on time and within budget. For project planning,
    portfolio management is another vital feature in a PSA package contain.
    This helps project teams with project planning and analysis while
    delivering key metrics.

Recommendations for businesses considering the possibility of acquiring
PSA software include the following:

  • Top-level Support – If management does not accept the
    value proposition presented by PSA software, then the implementation
    process is bound to fail. Furthermore, management must communicate the
    benefits of PSA software to employees, because the implementation stage
    will be unsuccessful if some workers support the move while others
    oppose it. Transparency will help in winning the good will of employees.
  • Plan Ahead – Implementing PSA software can be an
    expensive proposition for a business that acquires a solution that
    does not integrate with existing enterprise solutions. The enterprise
    should list everything needed to implement PSA software and then
    accomplish each step in a systematic process. This will spread out the
    cost of implementation so the enterprise does not have to make a single
    large financial commitment. Choosing PSA software that offers module
    selection is one way to reduce costs because the business can initially
    select the modules most important to it. The enterprise should also test
    as many different solutions as possible. For businesses unable to afford
    the acquisition of PSA software, businesses may be able to obtain a
    PSA application on a rental basis by paying a monthly fee.
  • Evaluate Scale Options – Some solutions are designed
    for or are more appropriate for large companies, whereas some are a
    better fit for mid-sized or small firms. Businesses should resolve the
    issue of scale before committing to any particular solutions. Consider
    the size of the industries the vendors compete in. Ask vendors for lists
    of businesses using particular types of PSA applications.
  • Leverage the Internet – Businesses need to be ready
    to invest in building robust infrastructures with reliable Internet
    access, if they have not already done so. PSA software should be
    accessible to employees and management whether they are in the office or
    at home working remotely. Businesses that do not make necessary
    upgrades may compromise the effectiveness of PSA applications. The
    future of PSA software is almost certainly on the Internet, which trends
    toward providing unprecedented levels of availability so users can
    access information remotely with the same tools they can access
    locally in the workplace.
  • Integration – Installing PSA software is one thing,
    but integrating the software into existing communication, financial, and
    project management solutions is another. Increasing the ease of
    integration of PSA applications into existing corporate software will
    undoubtedly determine the success or failure of many products. As demand
    increases, vendors will increasingly focus on enabling PSA software to
    interact with corporate email systems, spreadsheets, data bases, and

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